Like all bubbles that have burst in the past, Crocs (NASDAQ:CROX) popped hard. In less than a year, the stockholders have lost 97% of their equity as the company has dropped from nearly $75 to under $1 in just a year.

I was an early bear on Crocs and I've continually questioned its existence as a public company. And here I am again, writing about yet another ugly quarter from the shoe company, when doing so before has earned me some of the most vicious and vitriolic hate mail I've ever seen -- until Crocs finally hit hard times, that is. The company's fans didn't take kindly to anyone suggesting maybe the Emperor didn't have any clothes (or that the clothes he did have might be extremely faddish).

Crocs shareholders had better brace themselves for some woeful news yet again, assuming they've stayed in this game this far -- a game which, by the way, looks like it's just about over.

Growth's like slamming into a wall at 50 mph
Crocs' third-quarter net loss clocked in at $148 million, or $1.79 per share. Remember that last year this time it reported a quarterly profit of $56.5 million, or $0.66 per share. Oh, how times have changed.

When I peeked at Crocs' 10-Q in August, the company said it was assessing some noncash charges in the third quarter. Boy, did it ever! The third-quarter results include $104.1 million in restructuring charges, including a whopping $70 million charge related to an inventory write-down. It sure seems like Crocs is trying to wipe its balance sheet clean of all its sins, and that has a lot to do with a whole lot of colorful plastic clogs hardly anybody wants at the moment.

For even more stomach-churning tidings, revenue fell 32% to $174.2 million, and gross profit was 1.4% of revenues, compared to 60.6% of revenues this time last year. Whew! I have to say, I have never seen gross profit drop like that. And the company expects a net loss of $0.50 per share to $0.65 per share in the fourth quarter.

Ouch. It should also be noted that the company has filed an extension on filing its 10-Q with the SEC, just as it did last quarter. Given its major problems, I think shareholders should make a date with themselves to check out the filing once it hits.

It's much more than the economy, stupid
I can't get over the opening statement in the conference call. CEO Ron Snyder doesn't hesitate to push blame on the tough economy. But the sluggish retail environment doesn't even begin to explain Crocs' current woes. Sure, lots of consumer-facing companies that provide discretionary products are facing major problems because of the current spending slowdown. But Crocs' problems are its own and have been obvious for quite some time now.

About a year ago I got flamed beyond belief when I said that I thought Crocs was a fad (read the comments -- they're a real hoot). This was right before the company started to choke. Since then, it has proceeded to choke again and again. Things were already pretty awful for Crocs in July, when I asked "How Low Can This Stock Go?" and pointed out it could always go lower, and I was pretty sure it was a good stock to stay away from. Sure enough, that night it warned and plunged again.

I do feel sorry for people who bought Crocs at $75, but at the same time, I hope they've learned an important lesson from all of this. Crocs traded for as much as 70+ times earnings at one point, the kind of multiple that investors pay for tech companies which are constantly innovating -- not shoe companies that can all too easily become one-hit wonders. In its heyday,  the company's stock often spiked on news, like licensing deals with entities like Disney (NYSE:DIS) or NASCAR. Fundamentals went out the window, and anybody who pointed that out was likely to get a raft of hate mail from Crocs stock fanatics.

And last but definitely not least, Crocs management was selling shares furiously when the stock was at its highs -- a perfect example of the old saw "buyer, beware!" My Foolish colleague Seth Jayson was right when he wondered if anyone would learn from Crocs.

Just don't do it
Granted, shoe companies haven't made great stock ideas here lately. Heely's (NASDAQ:HLYS) is another faddish flameout. Timberland has struggled as well. And while I like Deckers (NASDAQ:DECK) and Skechers (NYSE:SKX), the short term will be rough. (And I can't say I was crazy about Skechers' amorous intentions toward Heely's.)

An acquisition of Heely's sounds silly to me since that strikes me as an even worse fad than Crocs (if that's possible). However, I actually can imagine Crocs as a possible takeover candidate. Crocs does have the proprietary Croslite material and someone like Nike (NYSE:NKE) or Under Armor (NYSE:UA) could certainly snap Crocs up. After all, Crocs is selling for peanuts compared to its previous valuations and its debt-free balance sheet does sport an attractive cash level.

Even shoes that go through fad phases will win over some lifelong fans, if not the masses, while the styles are hot. So, yeah, a few pairs of Crocs may still be around in five years -- but the crazy double- and triple-digit percentage growth that attracted investors to the company in the first place is a thing of the past.

Investors initially bought Crocs for its heady growth and quick rise to popularity. Investors today argue that the stock is a value, particularly since it is trading under a dollar. Just as it was irrational to invest in Crocs during its faddish bubble, it's just as nonsensical to believe this company is undervalued. The fact is, the company may still be overvalued given that it could be nonexistent -- at least as a public company -- in the near future.

At this point, buying Crocs is like buying a lottery ticket: Maybe the company will be bought out at some premium, but you're taking your chances. In this ferocious bear market, investors should focus on high-quality, non-fad companies, and not on speculative, former momentum stocks that may never do much of anything again. Or worse, never recover.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.